Price per crossing ($) 8 7 6 5 4 3 2 1 0
Number of crossings (¡®000) 0 100 200 300 400 500 600 700 800
a. If the company were to build the bridge, what would be its profit-maximizing price? Would that be the efficient level of output? Why or why not?
b. If the company is interested in maximizing profit, should it build the bridge? What would be its profit or loss?
c. If the government were to build the bridge, what price should it charge?
d. Should the government build the bridge? Explain your answer.